Keep the Liquor Monopoly

North Carolina Governor Bev Perdue has come out against selling the State liquor monopoly.  Good for her.  Selling income-producing assets to plug revenue holes looks shortsighted.  What’s next, selling Mount Mitchell State Park, http://www.ncparks.gov/Visit/parks/momi/main.php?  Jockey’s Ridge, http://www.jockeysridgestatepark.com/?  Hanging Rock, http://www.ncparks.gov/Visit/parks/haro/main.php?

Yes, we need to clean up the mess in the ABC system, but the free enterprise theoreticians who want private choice to rule supreme always and everywhere shouldn’t cause us to confuse the baby with the contents of the bathtub, be they water or gin.  The profit motive is a powerful force, and we the people have the power and the duty to channel it.  (That’s my opinion.)

But some folks haven’t given up on selling the monopoly.  If it is sold, it’s troublesome to think that the Legislature might throw something together in short order.  There are so many questions to answer.  How will we sell it?:  Secret bids?  Open outcry?  Dutch auction?  Who will decide who is eligible to bid?  Will counties be able to decide their own fate?  Can we issue temporary licenses – renting the monopoly rather than selling it?  If we sell or rent the monopoly, there is a lot of work to be done around the edges to reduce the give-away – and to prevent cronyism.  And to protect the revenue base, like indexing tax amounts for inflation.

I am starting to do some research on this issue, and am fussing with Rob Christensen, who wrote “North Carolina . . . is one of only four states left in the country where the state still maintains a monopoly to sell booze,” http://www.newsobserver.com/2011/01/02/894266/top-news-of-2011-foretold.html – which portrays us as some kind of backward outlier, incorrectly, because there are 18 states with monopolies.

For instance, http://alcoholpolicy.niaaa.nih.gov/Alcohol_Control_Systems_Wholesale_Distribution_Systems_for_Spirits.html?tab=specificDate says 12 states have “Wholesale Distribution Systems for Spirits” that are “State-run.” Six more have “Mixed/Overlapping” systems (“a system in which some or all beverage subtypes are sold through both the state-run and license systems”), for a total of 18.  That number 18 shows up again in this official US Government site: http://www.ttb.gov/wine/control_board.shtml.

As for even the subcategory of “Retail Distribution Systems for Spirits,” http://alcoholpolicy.niaaa.nih.gov/Alcohol_Control_Systems_Retail_Distribution_Systems_for_Spirits.html, the NIH authority cites eight states (way more than four even for that category) as “State-run.”

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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